To Create or Save Jobs

“WASHINGTON (Reuters) – President Barack Obama said on Monday accelerated stimulus spending would create or save 600,000 jobs over the next 100 days, pledging action to slow the growth of unemployment that has reached a 25-year high.”

Now, when I first heard the “create or save” phrase during the campaign, and again when Mayor Bloomberg of New York said it and finally when President Obama repeated the phrase last Monday my very first thought in each case was, “How do you measure that?”

Thinking clearly is an active process. You must decide to think and you must constantly practice thinking and analyzing. Before Obama I never heard a politician claim to “save” jobs. Even verifying the number of jobs a politician claims to create, much less save, is problematic.

Let’s say Frick is President and during Frick’s tenure unemplyoment goes down or the total number of employed people goes up. That’s two very different things, by the way, since the number of people employed is only one of two numbers needed to calculate the percentage unemployment. But let’s say unemployment goes down while Frick is President. That’s a calculable number, of course, but what makes us attach this good news to Frick? Maybe Frick had nothing to do with it. Maybe we have Congress to thank. Or maybe China or India had an economic boom resulting in the purchase of more US products. Maybe the unemployment numbers improved in spite of the actions by Frick. How do we know?

Certainly we can measure things like unemployment. Those measuremets can be complicated and it may be difficult to get accurate numbers. But we can imagine ways to do that. However, explaining our measurements is what it’s all about and depends on having a theory, or at least a hypothesis, to fit those number into. That is,  it depends on knowing more than just the numbers.

In the case of unemployment, you must have some idea of what the responsibilities of the President and Congress are. You must know that Congress passes laws and the President enforces them. So if the president is only supposed to execute what Congress orders, how can we credit or blame the President for almost anything? In addition, if we understand that economic conditions are often the result of some much earlier event, how can we prove the current President or Congress is responsible for our circumstances rather than the last President or even a President from 50 years ago?

This is all pretty complicated and depends on having good data and a good theory that explains events. Today, that school of thought that thinks all great things flow from government and all bad things come from elsewhere, are willing to credit government for all that is good in the world without question or analysis. And they are also willing to ignore data that contradicts the conclusion they prefer.

So what am I supposed to do with the claim that the President will “create or save” jobs? Of course we still have all those conflicting economic theories to contend with. (I’ll deal with “conflicting” another time.) But, more fundamentally, how do you measure “saved?” You can measure, with some success, the number of people who are unemployed. But how do you measure the number of people who have jobs they might not have had except for some great magic trick by the President? Or was it Congress, the previous President or was it India?

Because you can’t even measure the number of jobs “saved” unless you are some sort of raving, ideologue, mind-reader my conclusion is that any politician who tells me he will save jobs is BSing me.


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